Correlation Between Sixt Leasing and Fortescue Metals
Can any of the company-specific risk be diversified away by investing in both Sixt Leasing and Fortescue Metals at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Sixt Leasing and Fortescue Metals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sixt Leasing SE and Fortescue Metals Group, you can compare the effects of market volatilities on Sixt Leasing and Fortescue Metals and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Sixt Leasing with a short position of Fortescue Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sixt Leasing and Fortescue Metals.
Diversification Opportunities for Sixt Leasing and Fortescue Metals
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Sixt and Fortescue is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Sixt Leasing SE and Fortescue Metals Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fortescue Metals and Sixt Leasing is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Sixt Leasing SE are associated (or correlated) with Fortescue Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fortescue Metals has no effect on the direction of Sixt Leasing i.e., Sixt Leasing and Fortescue Metals go up and down completely randomly.
Pair Corralation between Sixt Leasing and Fortescue Metals
Assuming the 90 days trading horizon Sixt Leasing SE is expected to generate 0.76 times more return on investment than Fortescue Metals. However, Sixt Leasing SE is 1.31 times less risky than Fortescue Metals. It trades about -0.13 of its potential returns per unit of risk. Fortescue Metals Group is currently generating about -0.32 per unit of risk. If you would invest 945.00 in Sixt Leasing SE on October 10, 2024 and sell it today you would lose (35.00) from holding Sixt Leasing SE or give up 3.7% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sixt Leasing SE vs. Fortescue Metals Group
Performance |
| Timeline |
| Sixt Leasing SE |
| Fortescue Metals |
Sixt Leasing and Fortescue Metals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sixt Leasing and Fortescue Metals
The main advantage of trading using opposite Sixt Leasing and Fortescue Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sixt Leasing position performs unexpectedly, Fortescue Metals can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Fortescue Metals will offset losses from the drop in Fortescue Metals' long position.| Sixt Leasing vs. Wizz Air Holdings | Sixt Leasing vs. GAMESTOP | Sixt Leasing vs. Corsair Gaming | Sixt Leasing vs. Pentair plc |
| Fortescue Metals vs. Hanison Construction Holdings | Fortescue Metals vs. Australian Agricultural | Fortescue Metals vs. TYSON FOODS A | Fortescue Metals vs. CN MODERN DAIRY |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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